European stocks opened cautiously and largely drifted on Tuesday, with investors pausing ahead of the European Central Bank's rate decision on Thursday and high energy prices fueling fresh inflation concerns.
The Euro Stoxx 50 closed 0.14% higher at 6,413.17 points. Outside the euro area, the British FTSE 100 dipped 0.10% to 10,811.66 points. The Swiss SMI fell 1.55% to 14,057.61 points, weighed heavily by pharmaceutical giant Novartis.
"Investors are hitting the brakes" and waiting for key data and central-bank decisions through the week, wrote Jürgen Molnar of Robomarkets. Brent crude for November delivery continued to approach the $100-a-barrel mark, underscoring ongoing energy-driven inflation risks. U.S. inflation figures due Friday could provide further clues on the Federal Reserve's monetary-policy room to maneuver.
On the corporate side, Novartis shares dropped more than 10%, extending losses after a disappointing result for a drug candidate the previous day. A late-stage study for a myotonic dystrophy treatment also failed, prompting analysts to question the company's longer-term growth targets. Novartis dragged the wider pharmaceutical complex lower: the Stoxx Europe 600 Health Care index lost more than 2%.
Sandoz, the generic-drug specialist spun off from Novartis, also finished in negative territory. The stock had surged on surprisingly upbeat growth ambitions but retreated from those highs to close slightly down.
